Tribune Media merger faces Justice scrutiny

Tribune Media and Sinclair Broadcast Group have each received a second request for information from the Justice Department, signaling government antitrust concerns about a media merger that's already drawn criticism from the right and the left of the political spectrum.

Sinclair proposed the $6.6 billion acquisition of Tribune Media in May, offering to pay $3.9 billion for the Chicago-based television conglomerate and absorb $2.7 billion in debt. The combination would create a broadcast behemoth, from Sinclair's Hunt Valley, Md., headquarters, covering about 72 percent of the nation's markets with ownership of about 215 TV stations.

While there appears to limited overlap in the two broadcasters' markets, the Justice Department request for more information, disclosed yesterday, means it likely has concerns about the merged company having too much control in some of them. The Federal Communications Commission also has oversight with respect to coverage considerations, and the divestiture of stations in some markets had been anticipated, but the Justice request ups the ante.

"There certainly are times when the DOJ competition concerns might call for some divestitures that the FCC process might not demand," said Dave Kully, a former Justice Department antitrust lawyer who is now an attorney with Holland & Knight in Washington.

Tribune Media disclosed the second request in a filing with the Securities & Exchange Commission yesterday, saying it received the additional inquiry Aug. 2.

While the two don't have any overlap in Chicago, they do both have stations in about 10 markets, including Seattle, Des Moines and Portland, Ore.

Sinclair's shares have declined about 14 percent in the past week, possibly on investor concerns that the deal could be blocked or slowed. Shares dropped 30 cents to $31.60 in early afternoon trading.

Tribune Media spokesman Gary Weitman declined to comment, and a Sinclair representative didn't immediately respond to a request for comment. Still, Sinclair CEO Chris Ripley spoke to the issue earlier this week on a conference call with analysts to discuss his company's second-quarter results.

"We really think we have a very, very strong case that nothing needs to be sold, but we did agree to sell to the extent we needed to, so that's why there's a process that we may launch in anticipation of that," he said on that Aug. 2 call in response to a question.